As the demand for copper continues to grow, a significant portion of new demand is expected to come from various applications. The electric vehicle sector is estimated to account for one third of the 10 million tons of new demand. Other areas of demand include electricity generation, transmission, distribution, automation, manufacturing capital expenditure, and cooling systems in data centers.
The increase in production of electric vehicles, solar panels, and grid investments in China has led to a rise in demand for copper. This has been driven by its use in the power and construction industries, complemented by a scarcity of refined copper metal and concentrate. Copper prices on the London Metal Exchange have reached two-year highs near $10,000 a ton as a result.
However, this growth is threatened by diminishing stocks in LME registered warehouses and disruptions such as the closure of the Cobre mine in Panama. Consequently, analysts have reevaluated their forecasts for the copper market balance, with expectations of significant shortages of around 26 million tons this year. Graeme Train anticipates an increase in copper demand due to industrialization and urbanization in emerging economies like India, where per capita copper consumption stands at only half a kilogram.
Comparatively, per capita copper consumption stands at 10 kilograms and seven kilograms respectively in China and developed nations respectively. Overall, the copper market is expected to experience sustained growth driven by various sectors and emerging markets with particular focus on technological advancements and infrastructure development.
